EPA sets 2013 percentages for Renewable Fuel Standard; anticipating adjustments to 2014 volume requirements
The US Environmental Protection Agency (EPA) finalized the 2013 percentage standards for four fuel categories that are part of the Renewable Fuel Standard (RFS) program. The final 2013 overall volumes and standards require 16.55 billion gallons of renewable fuels to be blended into the US fuel supply (a 9.74% blend).
The 2013 standard specifically requires: biomass-based diesel (1.28 billion gallons; 1.13%); advanced biofuels (2.75 billion gallons; 1.62%); and cellulosic biofuels (6.00 million gallons; 0.004%). These standards reflect EPA’s updated production projections. All volumes are ethanol-equivalent, except for biomass-based diesel which is actual volume.
A January 2013 ruling by the US Court of Appeals required the agency to reevaluate projections for cellulosic biofuel to reflect market conditions; the final 2013 standard for cellulosic biofuel announced today was developed in a manner consistent with the approach outlined in that ruling.
For the purposes of establishing the standard, EPA projected the bulk of the cellulosic biofuels to come from the KiOR plant in Columbus, Mississippi (5-6 million gallons of renewable gasoline and diesel), with the remainder coming from INEOS Bio’s cellulosic ethanol plant in Florida (0-1 million gallons).
During this rulemaking, EPA received comments from a number of stakeholders concerning the “E10 blend wall.” Projected to occur in 2014, the “E10 blend wall” refers to the difficulty in incorporating ethanol into the fuel supply at volumes exceeding those achieved by the sale of nearly all gasoline as E10. Most gasoline sold in the US today is E10.
EPA said it recognizes that ethanol will likely continue to predominate the renewable fuel pool in the near future, and that for 2014 the ability of the market to consume ethanol in higher blends such as E85 is highly constrained as a result of infrastructure- and market-related factors.
EPA does not currently foresee a scenario in which the market could consume enough ethanol sold in blends greater than E10, and/or produce sufficient volumes of non-ethanol biofuels to meet the volumes of total renewable fuel and advanced biofuel as required by statute for 2014.
Therefore, EPA anticipates that in the 2014 proposed rule it will propose adjustments to the 2014 volume requirements, including the advanced biofuel and total renewable fuel categories. It said that it expects that in preparing the 2014 proposed rule, it will estimate the available supply of cellulosic biofuel and advanced biofuel volumes, assess the ethanol blendwall and current infrastructure and market-based limitations to the consumption of ethanol in gasoline-ethanol blends above E10, and then propose to establish volume requirements that are reasonably attainable in light of these considerations and others as appropriate.
EPA is also providing greater lead time and flexibility in complying with the 2013 volume requirements by extending the deadline to comply with the 2013 standards by four months to 30 June 2014.
The Energy Independence and Security Act (EISA) established the RFS program and the annual renewable fuel volume targets, which steadily increase to an overall level of 36 billion gallons in 2022. To achieve these volumes, EPA calculates a percentage-based standard for the following year. Based on the standard, each refiner and importer determines the minimum volume of renewable fuel that it must ensure is used in its transportation fuel.